This document provides an introduction to budget impact analysis (BIA). It discusses that BIA is an economic assessment that estimates the financial consequences of adopting a new healthcare intervention. It notes that BIA is an essential part of comprehensive economic assessments along with cost-effectiveness analysis. The document outlines the key components of a BIA, including estimating the eligible patient population, time horizon, current and future treatment costs, and changes in disease-related costs. It also discusses presenting the changes in annual healthcare budget impact. The document compares BIA and economic evaluation, and provides considerations for BIA such as substitution, combination, and expansion effects of new interventions.

1. INTRODUCTION TO
BUDGET IMPACT
ANALYSIS
Nazmi Liana Azmi, Pharmacist
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2. Health Technology Assessment
Multidisciplinary process, summarizes information on:
• Safety
• Effectiveness
• Cost-effectiveness
•BIA
• Organizational impact / resource implications
• Social & ethical issues
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3. • BUDGET is crucial for healthcare providers as
it allows an organization to better understand which
funds can be spent on a certain project or section, and
how much spending should be allotted to each
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4. Money makes
the (medical) world go around
• P.S : It’s true 
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5. Ref: Dr Asrul’s Presentation in BIA Workshop 2015 5

6. Budget impact analysis (BIA)
•An economic assessment that
estimates the financial
consequences of adopting a new
intervention
•Intervention = example new
technology or NEW DRUG
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7. BIA
• Essential part of comprehensive economic
assessment, along with Cost Effective Analysis
• Tool to predict the financial impact of the adoption
and diffusion of a new technology into a healthcare
system with fixed resources
• To address feasibility / affordability
• Users: those who manage and plan healthcare budgets
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8. Why need to do BIA?
• How new intervention impacts on health plan budget?
• Required to make an informed listing / reimbursement
decision:
 New technology may have increased acquisition cost
 New technology may add cost or offset its higher cost
due to changes in condition cost (e.g: adverse effects,
inpatients days)
 New technology may have different impact on different
cost centres e.g drug costs, laboratory costs, staff costs
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9. Uses of BIA
• Budget planning
• Forecasting
• Estimating impact of health technology
changes on health insurance premiums
• Estimating (potential) fiscal impact of
pursuing an intervention at the national level
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10. MOHMF Listing Process
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11. Why not only economic evaluation?
I have to plan
budget for the
next 2, 3, 4 years?
What annual
health
benefits are?
How much this
new drug will
increase and save
my budget?
Oh yes!!
It is cost effective.
Let’s buy; but can
we afford this?
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12. BIA vs economic evaluation
Parameter BIA Economic evaluation
Underlying
concept
Affordability Value for money
Objective Financial impact of introducing
a technology
Economic efficiency of alternative
technologies
Study time frame Budget holder preference,
short term (1-5 years)
Preferably lifetime
Health outcomes Excluded /no need to monitor
patients / no utility measure
Included (e.g quality-adjusted life
years)
Perspective Budget holder / payer Society /third payers
Discounting No 3-5%
Result Total incremental cost / savings Incremental cost per unit health
outcome achieved (ICER:
incremental cost effectiveness
ratio / incremental cost per QALY
unit
Information from
results
Affordable / not affordable Cost-effective / not cost-effective
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13. Two approaches
Simple approach
• Estimate the number of patients using product (A)
• Estimate the unit cost of product (B)
• Estimate the rate of increased uptake over time (e.g 3-5
years) e.g 5% increase per year (C)
Comprehensive approach / Dynamic model
• Allow eligible population size and disease severity to
change over time
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14. What else to consider in BIA?
• Whether the intervention is replacing the
existing standard of care (substitution)
• Whether the intervention is being used in
addition to the existing standard
(combination)
• Whether the intervention will be used in the
situations where there has been no existing
care (expansion) – in the case of patient
intolerance of standard care, inconvenience,
loss of effect 14

15. Analysis framework for BIA
Ref: Brosa M, Gisbert R, Rodrez Barrios JM, Soto J. Pharmacoeconomics
Spanish Research Articles 2005; 2: 65-79
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17. 6 steps approach
in BIA
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18. 18

19. Step1: Estimatingeligiblepopulation
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Step2: Selectingtime horizon
Step3: Identifying current & future
treatmentmix
Step4: Estimatingcurrent & future costs
Step5: Estimatingchangesin disease
relatedcosts
Step6: Estimating& presentingchanges in
annual budgetimpact

20. • Example: Does the listing of Sunitinib in MOHMF has
an effect on the budget?
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Presentation of BIA

21. 21
Presentation of BIA

22. Addressing uncertainty
Sensitivity analysis
• Analysis to assess how different values (input) impact the
findings (output)
• Specify range & alternative values for uncertainty &
scenario analysis obtained from review / consultations
• Results often presented in Tornado diagram
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23. Want to know more?
Do contact me  23